Circumstances in which Board assumes responsibility for eligible schemes

4.—(1) Articles 111 (duty to assume responsibility for schemes following insolvency event) and 112 (duty to assume responsibility for schemes following application or notification) apply as if, in paragraph (2) of each Article –

(a)for “responsibility for the scheme” there were substituted “responsibility for the unsecured part”, and

(b)in sub-paragraph (a), after “protected liabilities” there were inserted “of that part”.

(2) Article 113 (applications and notifications for the purposes of Article 112) applies as if, in paragraph (1), for “responsibility for the scheme” there were substituted “responsibility for the unsecured part”.

Reconsideration

(a)in the definition of “audited scheme accounts”, for “a scheme” there were substituted “an unsecured part”, and

(b)in the definition of “protected benefits quotation” –

(i)for “a scheme” there were substituted “an unsecured part”;

(ii)for “member of the scheme” there were substituted “member of the unsecured part”; and

(iii)in paragraph (a) of that definition, for “responsibility for the scheme” there were substituted “responsibility for the unsecured part”.

(2) Article 136 (duty to assume responsibility following reconsideration) applies as if, in paragraph (9)(b), for “liabilities of the scheme” there were substituted “liabilities of the unsecured part”.

Closed schemes

9.—(1) Article 137 (closed schemes) applies as if –

(a)in paragraph (3), for “in respect of the scheme” there were substituted “in respect of the unsecured part”; and

(b)in paragraph (7), in the definition of “full buy-out quotation” –

(i)for “a scheme” there were substituted “an unsecured part”; and

(ii)for “member of the scheme” there were substituted “member of the unsecured part”.

(2) Article 140 (valuations of closed schemes) applies as if –

(a)in paragraph (1), for “actuarial valuations of the scheme” there were substituted “actuarial valuations of the unsecured part”;

(b)in paragraph (5), for “actuarial valuation of the scheme” there were substituted “actuarial valuation of the unsecured part”, and

(c)in paragraph (6) –

(i)for the definition of “actuarial valuation” there were substituted the following definition –

““actuarial valuation” means a written valuation of –

(a)

the assets of the unsecured part,

(b)

the full liabilities, and

(c)

the protected liabilities in relation to the unsecured part,

prepared and signed by the actuary;”.

(ii)for the definition of “full scheme liabilities” there were substituted the following definition –

““full liabilities” means –

(a)

the liabilities under the scheme rules to or in respect of members of the unsecured part,

(b)

other liabilities of the unsecured part, and

(c)

the estimated cost of winding up the unsecured part;”.

Assumption of responsibility

10.—(1) Article 144 (transfer notice) applies as if –

(a)after paragraph (4), there were inserted the following paragraph –

“(4A)The Board shall, as soon as reasonably practicable after it is required to assume responsibility for an unsecured part, obtain a further actuarial valuation of the assets and protected liabilities of that part as at the date on which it is required to assume responsibility for that part; and a transfer notice may not be given in relation to the unsecured part until that valuation has been approved by the Board and become binding.”;

(b)after paragraph (7), there were added the following paragraphs –

“(8)Subject to paragraph (9), the following provisions apply in relation to a valuation obtained under paragraph (4A) as they apply in relation to a valuation obtained under Article 127 (Board’s obligation to obtain valuation of assets and protected liabilities) –

(a)paragraphs (4) to (7) and (11)(a), (b) and (d) of that Article;

(b)Article 128 (approval of valuation); and

(c)Article 129 (binding valuations), other than paragraph (2).

(9)In the application of Article 127 by virtue of paragraph (8), paragraphs (5) and (11)(b) of that Article apply as if the references to the “relevant time” were to the date on which the Board is required to assume responsibility for the unsecured part.”.

(2) Article 145 (effect of Board assuming responsibility for a scheme) applies as if in paragraph (2) –

(a)in sub-paragraph (b), after “pension obligations” there were inserted “in relation to the unsecured part”; and

(b)for “the scheme is to be treated” there were substituted “the unsecured part is to be treated”.

(3) Article 149 (guaranteed minimum pensions) applies as if, in paragraph (1), for “member of the scheme” there were substituted “member of the unsecured part”.

(4) Schedule 5 to the Order (transfer of property, rights and liabilities to the Board) applies as if –

(a)in paragraph 1, after “liabilities” there were inserted “of the unsecured part”, and

(b)in paragraph 3(1) –

(i)after “transfer” there were inserted “of the unsecured part”, and

(ii)after “in their capacity as trustees or managers” there were inserted “of that part”.

(5) Schedule 6 to the Order (pension compensation provisions) applies as if –

(a)for paragraphs 1 and 2 there were substituted the following paragraphs –

“1.This Schedule applies for the purposes of determining the compensation payable where the Board assumes responsibility for an unsecured part in accordance with this Chapter.

2.In this Schedule –

(a)references to “the assessment date” are to the date on which the assessment period in relation to the scheme, or (where there has been more than one such assessment period) the last one, began; and

(b)references to “the scheme” are to the unsecured part for which the Board has assumed responsibility.”, and

(b)in paragraph 37(1), in the definition of “the scheme”, for “paragraph 1” there were substituted “paragraph 2”.

General interpretation

11. In relation to a partially guaranteed scheme, Article 2 (general interpretation) applies as if there were inserted the following definitions at the appropriate alphabetical places –

““eligible scheme” has the meaning given by Article 110;

“partially guaranteed scheme” means an eligible scheme in respect of which a relevant public authority has –

(a)

given a guarantee in relation to –

(i)

any part of the scheme;

(ii)

any benefits payable under the scheme rules; or

(iii)

any members of the scheme; or

(b)

made any other arrangements for the purposes of securing that the assets of the scheme are sufficient to meet any part of its liabilities;

“relevant public authority” has the meaning given by Article 280(4);

“unsecured part” means any part of a partially guaranteed scheme –

(a)

in respect of which no guarantee has been given by a relevant public authority;

(b)

which relates to benefits payable under the scheme in respect of which –

(i)

no such guarantee has been given, and

(ii)

no other arrangements as are mentioned in Article 280(3)(b) have been made.”.

Sealed with the Official Seal of the Department for Social Development on 28th February 2005.

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